A point in time, event or experience when one has a sudden insight or realization: My aha moment was when I realized asset tracking software increased my rental billings by 5%.
Suppliers using manual, paper-based systems to track rental of their portable assets often struggle with inaccurate customer rental balances. Errors occur when handwritten information is illegible, data is mis-keyed, delivery tickets get lost or order add-ons fail to be recorded.
Without good tracking, it’s easy for one or two assets to go unnoticed when delivering and returning large quantities of assets. Over time, these seemingly small errors can create a large disparity between what the rental system balance shows and what is actually with the customer.
If a customer thinks their balance is higher than it should be, they usually call to have it corrected. The supplier can burn a lot of time researching the issue, sorting through paper records and consulting with sales staff and delivery drivers. An audit may need to be performed at the customer’s site, which can result in writing off “lost” assets and rental revenue. In the end, it erodes customer trust.
This experience can lead suppliers to incorrectly conclude that asset tracking software will uncover more instances of overstated customer balances, and thus create more headaches. They fear that imbalances as small as one or two assets will add up to a significant amount when multiplied over hundreds of customers. The interesting reality is that this fear can blind suppliers to cases where mistakes favor customers, and they permanently lose out on rent that should be collected from those customers whose balances are too low.
“We discovered a number of accounts that had more cylinders than we were billing them for. When they started to exchange those assets one for one, we were able to recover and start billing for all those assets that were out in the market. We think our rental billings increased between three to five percent from that fact alone.” – Bob Ewing, President, Red Ball Oxygen
A good asset tracking system uncovers instances where a customer is being undercharged.
Consider a case where a customer actually has three assets, but due to a past error, shows a rental balance of two. If the customer always exchanges two cylinders, the supplier never becomes aware that the customer really has three assets unless they audit the customer or track the assets uniquely with an asset tracking software system. [See the infographic.]
Our experience shows that suppliers are missing out on rent for up to 5 percent of the assets at customer sites. Here are two quick formulas to determine the value an asset tracking system can offer:
Quantity of assets at customer locations
× 5% unaccounted for at customer locations
= Quantity of assets recovered by tracking software
× $ annual rent per asset
= $ rental increase
Quantity of assets recovered by tracking software
× $ value of each asset
= $ value of recovered assets
Recovering this five percent loss equates to real rental income that goes straight to the bottom line, year after year. Meanwhile, the value of the recovered assets that were unaccounted for could have disappeared completely from inventory.